Bombardier profit takes off with pricier jet deliveries
10:10 am Thursday, April 27th, 2023
By Allison Lampert and Anandita Mehrotra
MONTREAL (Reuters) -Business jet maker Bombardier Inc said on Thursday it had swung to a first-quarter adjusted profit, helped by increased deliveries of its pricier planes.
Bombardier also reported improved operating margins and a 17% rise in quarterly revenue to $1.5 billion on more deliveries of medium and large-cabin corporate jets, and demand for aftermarket services.
However, the Canadian company reported negative $247 million in free cash usage, a closely watched metric, partly due to higher working capital needs to deliver more than 138 planes this year, up from 123 in 2022.
Like U.S. rival General Dynamics Corp’s Gulfstream which reported on Wednesday, Bombardier saw a temporary pause in orders around the end of March after a U.S regional banking crisis.
Activity has since returned to normal and demand is stable Chief Executive Eric Martel told analysts. Bombardier’s $14.8 billion backlog is flat since the end of 2022.
“The regional banking crisis had an impact probably for two to three weeks on us,” Martel said.
Earlier, Cessna business jet maker Textron Inc. reported higher profit on stronger pricing.
Business jet makers are planning to deliver more planes this year, despite concerns over supply chain snarls, after a surge in demand to fly private during the COVID-19 pandemic.
But those early gains in private traffic are diminishing compared with 2019, business aviation research consultancy WingX said in a Thursday note, as economic shadows loom.
“We’re ready for it if it happens,” Martel said of the prospect of an economic downturn.
Bombardier reported adjusted earnings per share of $1.06. Analysts on average were expecting an EPS loss of four cents a share, Refinitiv data showed.
Adjusted net income was $113 million, compared with a loss of $69 million a year earlier.
Bombardier delivered 22 business jets during the quarter, up one from a year earlier. However it delivered two more medium-sized and two more large-cabin business jets which command stronger pricing.
(Reporting by Allison Lampert in Montreal and Anandita Mehrotra in Bangalore; Additional reporting by Ananta Agarwal in Bangalore; Editing by David Goodman, Anil D’Silva, Sharon Singleton and Alexander Smith)
